DEF 14A 1 sptn-def14a_20210526.htm DEF 14A sptn-def14a_20210526.htm

 

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

SCHEDULE 14A

Proxy Statement Pursuant to Section 14(a) of the

Securities Exchange Act of 1934 (Amendment No.       )

 

 

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Definitive Proxy Statement

 

Definitive Additional Materials

 

Soliciting Material Pursuant to §240.14a-12

SpartanNash Company

 

(Name of Registrant as Specified in Its Charter)

 

(Name of Person(s) Filing Proxy Statement, if Other Than the Registrant)

 

 

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SpartanNash Company

850 76th Street, S.W.

P.O. Box 8700

Grand Rapids, Michigan 49518-8700

(616) 878-2000

SpartanNash Company Notice of Annual Meeting and Proxy Statement

April 13, 2021

Dear SpartanNash Shareholder,

 

Looking back on 2020, I am proud of the way SpartanNash, specifically our team of frontline associates, worked tirelessly to ensure their communities had the food, household goods, and pharmaceuticals they needed. Their collective efforts ensured a safe environment in which we were able to meet the increased demand from our customers and significantly exceed our financial expectations for the year. Our 2020 results tell the story:

 

Overall sales increased 9.5% driven primarily by continued growth with existing Food Distribution segment customers, consumer demand associated with the COVID-19 pandemic in the Retail and Food Distribution segments, and additional sales in the 53rd week in 2020.

 

Retail comparable sales grew 13.1%, including 200% growth in the Company’s eCommerce business and expansion in “OwnBrands”, our portfolio of private brands, which outpaced the market.

 

Operating earnings of $102 million, representing a significant increase from 2019, reflects the increase in sales, improvements in margin rates, and improved operating leverage across our platform.

 

The strength of our operating performance, allowed us to generate significant free cash flow supporting our ability to meaningfully reduce our long-term debt, enhance our balance sheet and financial flexibility and reduce interest expense.

 

Finally, we invested to extend our commercial agreement with Amazon, which will enable us to continue to generate growth in our food distribution segment.

 

The dynamic environment we navigated in 2020 highlighted our need to make certain improvements. Our focus in 2021 is to make the right investments to attract and retain top performing employees and improve our systems and processes.

 

To ensure we hold ourselves accountable for meeting our objectives, including fostering a people-first, high performance culture, we have defined a set of key performance indicators for 2021 including the following:

 

Investing in our associate experience by ensuring we offer competitive and compelling compensation, clear associate development opportunities, and a work environment designed to improve retention and engagement

 

Driving associate safety through an emphasis on training and process improvements in our distribution centers and retail stores

 

Improving distribution service levels, which were negatively impacted by COVID-19

 

Enhancing the offerings within our OwnBrands portfolio to drive higher sales in our stores and with our independent retail customers

 

Taking action to sustain improvements in gross margin levels through improvements in assortment and purchase concentration, while continuing to limit the impact of inventory shrink

On behalf of the Board of Directors, our leadership team, and all of our associates, I thank you for your continued support and investment in SpartanNash Company.

 

Sincerely,

Tony B. Sarsam

President and Chief Executive Officer

 

 

 

Your vote is important. PLEASE SIGN, DATE AND RETURN THE ENCLOSED PROXY CARD PROMPTLY OR VOTE BY PHONE OR ONLINE.

 


 

SPARTANNASH COMPANY

NOTICE OF ANNUAL MEETING OF SHAREHOLDERS

To our shareholders:

The 2021 Annual Meeting of Shareholders of SpartanNash Company will be held virtually on Wednesday, May 26, 2021, at 9:00 a.m., Eastern Daylight Time. At the meeting, we will consider and vote on:

1.

The election of directors from among the nominees identified in this proxy statement;

2.

Advisory approval of the Company’s executive compensation (the “say-on-pay” vote);

3.

Ratification of the selection of Deloitte & Touche LLP as our independent auditors for the current fiscal year (the fiscal year ending January 1, 2022); and

4.

Any other business that may properly come before the meeting.

Record date: You may vote if you were a shareholder of record on March 29, 2021.

If you plan to attend the meeting: We have adopted a virtual format for our Annual Meeting in order to provide all of our shareholders an opportunity to participate regardless of location.  You may participate in the virtual meeting by registering in advance at www.proxydocs.com/SPTN prior to the deadline of 5:00 p.m. Eastern Daylight Time on May 24, 2021. Participants will be required to enter the control number found on their proxy card, voting instruction form or Notice of Electronic Availability. Upon completing registration, participants will receive further instructions via email, including unique links that will allow them to access the meeting and will permit them to submit questions during the meeting.

Important Notice Regarding the Availability of Proxy Materials: SpartanNash’s Proxy Statement and annual report to shareholders for the fiscal year ended January 2, 2021 are currently available for viewing via online at www.proxydocs.com/SPTN.

The Notice of Annual Meeting and accompanying Proxy Statement, Proxy, and 2020 annual report to shareholders were first sent or made available to our shareholders on April 13, 2021.  

Securities and Exchange Commission rules allow us to furnish our proxy statement and annual report to our shareholders on the Internet. We are pleased to take advantage of these rules and believe that they enable us to provide our shareholders with the information that they need, while lowering the cost of delivery and reducing the environmental impact of the documents related to our Annual Meeting. You may obtain electronic copies of all of our filings with the U.S. Securities and Exchange Commission in the “Investor Relations” section of our website, www.spartannash.com, by clicking the “SEC Filings” link.

We will not report on our results of operations at the meeting. Please visit the Investor Relations section of our website, www.spartannash.com, for information about our business and results of operations.

It is important that your shares be represented at the Annual Meeting, regardless of how many shares you own. Please vote your shares using any of the means described in our proxy statement. Voting your shares prior to the meeting will not affect your right to vote virtually if you attend the virtual meeting.

BY ORDER OF THE BOARD OF DIRECTORS

Kathleen M. Mahoney

Executive Vice President Chief Legal Officer and Secretary

April 13, 2021

Your vote is important. PLEASE VOTE PROMPTLY ONLINE, BY PHONE, OR BY MAIL. See the information in the “General Information About the Meeting” section regarding how to vote, revoke a proxy, and vote in person.

 


 

 

TABLE OF CONTENTS

 

 

Proxy Summary

1

Election of Directors

5

Advisory Approval of the Compensation of Named Executive Officers

6

Ratification of Selection of Independent Auditors

7

Corporate Governance Principles

8

Corporate Responsibility

13

The Board of Directors

14

Independent Auditors

21

Audit Committee Report

22

Ownership of SpartanNash Stock

23

SpartanNash’s Executive Officers

24

Executive Compensation:

26

Compensation Discussion and Analysis

26

Compensation Committee Report

41

Summary Compensation Table

42

Grants of Plan-Based Awards

44

Outstanding Equity Awards at Fiscal Year-End

46

Option Exercises and Stock Vested

46

Qualified Defined Contribution Retirement Plan

47

Non-Qualified Deferred Compensation

47

Potential Payments Upon Termination or Change-in-Control

48

Pay Ratio Disclosure

51

Compensation of Directors

52

Compensation Committee Interlocks and Insider Participation

55

Transactions with Related Persons

56

Delinquent Section 16(a) Reports

57

Shareholder Proposals

58

Solicitation of Proxies

59

General Information About the Meeting

60

 

 

 

 


 

 

SpartanNash Company

ANNUAL MEETING OF SHAREHOLDERS

TO BE HELD May 26, 2021

PROXY STATEMENT

Dated April 13, 2021

 

 

PROXY SUMMARY

 

This summary highlights information contained elsewhere in this proxy statement. This summary does not contain all of the information that you should consider. You should carefully read the entire proxy statement and the Company’s annual report on Form 10-K before voting. We refer to the fiscal year ended January 2, 2021 as “2020”, the fiscal year ended December 28, 2019 as “2019,” and the fiscal year ended December 29, 2018 as “2018.” We refer to SpartanNash Company as “SpartanNash,” the “Company,” “we,” and “us.”

Annual Meeting of Shareholders

    Date and Time

 

May 26, 2021; 9:00 a.m. Eastern Daylight Time

 

 

 

    Meeting Registration Site

 

www.proxydocs.com/SPTN

 

 

 

    Record Date

 

March 29, 2021

 

 

 

    Registration Deadline

 

May 24, 2021; 5:00 p.m. Eastern Daylight Time

 

 

 

    Voting

 

Shareholders as of the close of business on the record date are entitled to vote. Each share of common stock is entitled to one vote for each director nominee and one vote for each of the proposals to be voted on.

 

 

 

    Admission

 

In order to attend the Annual Meeting virtually via the Internet, participants must register in advance at www.proxydocs.com/SPTN prior to the deadline of 5:00 p.m. Eastern Daylight Time on May 24, 2021. Participants will be required to enter the control number found on their proxy card, voting instruction form or Notice of Electronic Availability. Upon completing registration, participants will receive further instructions via email, including unique links that will allow them to access the meeting and will permit them to submit questions during the meeting. You may vote during the Annual Meeting by following the instructions available on the meeting website during the meeting.

Meeting Agenda

 

Election of directors from among those named in this proxy statement.

 

Advisory approval of the Company’s executive compensation as disclosed in this proxy statement.

 

Ratification of the selection of Deloitte & Touche LLP as our independent auditors for the fiscal year ending January 1, 2022.

 

Transact any other business that may properly come before the meeting.

Voting Matters and Vote Recommendations

The Board of Directors recommends that you vote FOR the election of each nominee, FOR approval of the Company’s executive compensation and FOR the ratification of the selection of Deloitte & Touche LLP.

 

1

SpartanNash Company Proxy Statement

 


 

PROXY SUMMARY (cont’d)

 

Quorum and Vote Required

The presence in person or by properly executed proxy of the holders of a majority of all issued and outstanding shares of SpartanNash common stock entitled to vote at the meeting is necessary for a quorum. At the Annual Meeting we will count toward a quorum any shares that are present or represented by proxy, including abstentions and shares represented by a broker non-vote on any matter.

A plurality of the shares voting is required to elect directors. This means that, if there are more nominees than positions to be filled, the nominees who receive the most votes will be elected to the open director positions. Abstentions, broker non-votes and other shares that are not voted in person or by proxy will not be included in the vote count to determine if a plurality of shares voted in favor of each nominee. A director-nominee receiving a greater number of votes “withheld” than votes “for” election is required to offer promptly his or her resignation to the Nominating and Corporate Governance Committee upon certification of the shareholder vote.

The other proposals set forth in this proxy statement will be approved if a majority of the shares that are voted on the proposal at the meeting are voted in favor of approval. Abstentions, broker non-votes and other shares that are not voted on a proposal in person or by proxy will not be included in the vote count to determine if a majority of shares voted on the proposal voted in favor of approval. The outcome of the advisory vote to approve executive compensation will not be binding on the Company, but the Compensation Committee and the Board of Directors will consider the voting results when making future compensation decisions.

We do not know of any other matters to be presented at the meeting. Generally, any other proposal to be voted on at the meeting would be approved if a majority of the shares that are voted on the proposal at the meeting are voted in favor of the proposal. Abstentions, broker non-votes and other shares that are not voted on the proposal in person or by proxy would not be included in the vote count to determine if a majority of shares voted on the proposal voted in favor of each such proposal.

 

2

SpartanNash Company Proxy Statement

 


 

PROXY SUMMARY (cont’d)

 

Board of Directors

The following table provides summary information about our directors during fiscal 2020. During fiscal 2020, each director attended at least 96% of the meetings of the Board and each committee on which he or she was a member.

 

 

 

 

 

 

Committee Memberships

Name

 

Occupation

 

Independent(1)

 

AC

 

CC

 

NCGC

M. Shân Atkins

 

Independent Business Executive and

Retired Retail and Consumer Executive

 

 

C, F

 

 

 

M

Dennis Eidson

 

Chairman of the Board and Former

Interim President and Chief Executive

Officer and Former Executive Chairman(2)

 

 

 

 

 

 

 

 

Frank M. Gambino

 

Professor of Marketing and the Director

of the Food & Consumer Packaged

Goods Marketing Program at Western

Michigan University

 

 

M

 

 

 

 

Douglas A. Hacker

 

Lead Independent Director

Independent Business Executive

 

 

 

 

M

 

M

Yvonne R. Jackson

 

President, Principal and Co-Founder of

BeecherJackson

 

 

 

 

C

 

M

Matthew Mannelly

 

Retired Chief Executive Officer of Prestige Brands

 

 

 

 

M

 

 

Elizabeth A. Nickels

 

Independent Business Executive and

Former Chief Financial Officer of

Herman Miller, Inc. and Former

Chief Financial Officer of Universal

Forest Products, Inc.

 

 

F

 

 

 

M

Major General (Ret.)

   Hawthorne L. Proctor

 

Managing Partner of Proctor & Boone

Consulting LLC and Senior Logistic

Consultant of Intelligent Decisions, Inc.

 

 

M

 

 

 

 

Tony B. Sarsam

 

President and Chief Executive Officer of SpartanNash

 

 

 

 

 

 

 

 

William R. Voss

 

Managing Director of Lake Pacific

Partners, LLC

 

 

 

 

M

 

C

 

 AC

 

Audit Committee

 

C

 

Chair

 CC

 

Compensation Committee

 

M

 

Member

 NCGC

 

Nominating and Corporate Governance Committee

 

F

 

Member and Financial Expert

 

 

(1)

Independent under Nasdaq independence standards for directors generally and for each Committee on which the director serves.

 

(2)

Mr. Eidson’s service as Interim President and Chief Executive Officer ended on September 20, 2020. He then assumed the role of Executive Chairman from September 21, 2020 through October 20, 2020. Prior to his interim service, Mr. Eidson was the Company’s President and Chief Executive Officer, retiring in May 2017.

 

3

SpartanNash Company Proxy Statement

 


 

PROXY SUMMARY (cont’d)

 

Corporate Governance Highlights

The Board believes that effective corporate governance should reinforce a culture of corporate integrity, foster the Company’s pursuit of profitable growth and ensure quality and continuity of corporate leadership. Highlights of our governance practices include:

 

Annual election of all directors

 

Any director who fails to achieve a majority vote “for” must offer his or her resignation

 

No supermajority requirements for shareholder voting

 

Lead Independent Director (Douglas Hacker)

 

Policy against hedging and pledging of our securities

 

Clawback policy for the recovery of incentive compensation

 

Annual say-on-pay vote

 

At least two-thirds of the board must be independent directors (currently 8 out of 10 directors are independent)

 

Board reflects diverse gender, race, viewpoints, backgrounds, skills, experiences and expertise

 

Directors may not serve on more than three other public company boards of directors without prior approval of the Nominating and Corporate Governance Committee (management directors limited to one outside public company board)

Executive Compensation Advisory Vote

We are asking our shareholders to approve on an advisory basis our named executive officer compensation for 2020 (the “say-on-pay” proposal). The Board recommends a FOR vote because it believes that our compensation policies and practices are effective in achieving the Company’s goal of attracting, motivating, rewarding and retaining the senior management talent required to achieve our corporate objectives and increase shareholder value through long-term profitable growth. The Board believes that executive compensation is appropriately tied to corporate performance.

Shareholder Outreach

During 2020 our executive leadership team actively sought out engagement with our investors to discuss our Company, our governance practices, and other topics of importance to investors. Our Board of Directors believes that Company management should proactively seek productive dialogue with our shareholders.

 

 

4

SpartanNash Company Proxy Statement

 


 

ELECTION OF DIRECTORS

 

 

 

The Board of Directors proposes that the following individuals be elected as directors of SpartanNash for a one-year term expiring at the 2022 Annual Meeting:

M. Shân Atkins

Frank M. Gambino

Douglas A. Hacker

Yvonne R. Jackson

Matthew Mannelly

Elizabeth A. Nickels

Hawthorne L. Proctor

Tony B. Sarsam

William R. Voss

Biographical information concerning the nominees appears below under the heading “The Board of Directors.” The persons named as proxies on the proxy card intend to vote for the election of each of the nominees. The proposed nominees are willing to be elected and to serve as directors. If any nominee becomes unable to serve or is otherwise unavailable for election, which we do not anticipate, the incumbent Board of Directors may select a substitute nominee. If a substitute nominee is selected, the shares represented by your proxy card will be voted for the election of the substitute nominee, unless you give other instructions. If a substitute is not selected, all proxies will be voted for the election of the remaining nominees. Proxies will not be voted for more than nine nominees.

Your Board of Directors recommends that you vote FOR election of all nominees as directors

 

5

SpartanNash Company Proxy Statement

 


 

ADVISORY (NON-BINDING) APPROVAL OF THE COMPENSATION OF NAMED EXECUTIVE OFFICERS

 

 

 

As required under Section 14A of the Securities Exchange Act of 1934, shareholders may cast an advisory vote on the compensation of the Company’s named executive officers as disclosed in this proxy statement pursuant to the SEC’s compensation disclosure rules. At the Company’s 2017 Annual Meeting, shareholders voted in favor of advisory approval of named executive officer compensation on an annual basis. The next shareholder vote regarding the frequency of advisory approval of named executive officer compensation will occur at the 2023 Annual Meeting.

As described in more detail in the “Executive Compensation” section of this proxy statement, the Company has designed its executive compensation programs to attract, motivate, reward and retain the senior management talent to manage the Company to achieve our corporate objectives and increase shareholder value through long-term profitable growth. We believe our compensation programs are focused on pay-for-performance principles and are strongly aligned with the long-term interests of our shareholders. For these reasons, and the reasons discussed in the “Compensation Discussion and Analysis” section of this proxy statement, we are asking our shareholders to vote “FOR” the adoption of the following resolution:

“RESOLVED, that the shareholders of SpartanNash Company (the “Company”) approve, on an advisory basis, the compensation of the Company’s named executive officers, as disclosed in the Company’s proxy statement for the 2021 annual meeting under the heading entitled “Executive Compensation.”

This vote is not intended to address any specific item of compensation, but rather the overall compensation of our named executive officers and the philosophy and programs described in this proxy statement.

The vote is not binding on the Company, the Board of Directors or the Compensation Committee. However, the Board of Directors and Compensation Committee value the opinions of our shareholders and will take the results of the vote into consideration when making future decisions regarding executive compensation.

Your Board of Directors recommends that you vote FOR approval of the compensation of the Company’s named executive officers.

 

 

 

6

SpartanNash Company Proxy Statement

 


 

RATIFICATION OF SELECTION OF INDEPENDENT AUDITORS

 

 

 

SpartanNash’s Audit Committee has approved the selection of Deloitte & Touche LLP (“Deloitte”) as the Company’s independent auditors to audit the financial statements and internal controls of SpartanNash and its subsidiaries for the fiscal year ending January 1, 2022, and to perform such other appropriate accounting services as may be approved by the Audit Committee. The Audit Committee and the Board of Directors propose and recommend that shareholders ratify the selection of Deloitte to serve as the Company’s independent auditors for 2021.

The Audit Committee evaluates the independence of the auditors at least annually. Deloitte has provided written affirmation that they are independent under all applicable standards, and the Audit Committee believes that Deloitte has effective internal monitoring of their independence. The Company and Deloitte have complied with SEC requirements on audit partner rotation. The lead audit partner was most recently rotated for the fiscal year ending December 29, 2018.

Independence is not the sole factor in the selection of the Company’s independent auditor. The Audit Committee also considers price, quality of service and knowledge of SpartanNash and the Company’s industry when selecting its auditor.

More information concerning the relationship of the Company with its independent auditors appears below under the headings “Audit Committee,” “Independent Auditors,” and “Audit Committee Report.”

The Audit Committee and the Board of Directors believe that the continued retention of Deloitte as the Company’s independent registered public accounting firm is in the best interest of the Company and its shareholders. Although shareholder ratification is not required by the Company’s organizational documents or applicable law, the Board of Directors values the shareholders’ views on the Company’s independent registered public accounting firm and as a matter of good corporate practice we ask you to ratify the selection of Deloitte. In the event that the shareholders fail to ratify the selection, it will be considered a recommendation to the Board of Directors and the Audit Committee to consider the selection of a different firm. Even if the selection is ratified, the Audit Committee may in its discretion select a different independent registered public accounting firm at any time during the year if it determines that such a change would be in the best interests of the Company and its shareholders.

Representatives of Deloitte are expected to be present at the Annual Meeting, will have the opportunity to make a statement if they desire to do so, and are expected to be available to respond to appropriate questions from shareholders.

Your Audit Committee and Board of Directors recommend that you vote FOR ratification of the selection of Deloitte & Touche LLP as our independent auditors for the fiscal year ending January 1, 2022.

 

 

 

7

SpartanNash Company Proxy Statement

 


 

CORPORATE GOVERNANCE PRINCIPLES

 

 

 

SpartanNash is committed to developing and implementing principles of corporate governance to help the Board fulfill its responsibilities to shareholders and to provide a framework for overseeing the management of the Company. The Board has adopted a written Corporate Governance Policy. The Policy is designed to communicate our fundamental governance principles and to provide management, associates, and shareholders with insight to the Board’s ethical standards, expectations for conducting business, and decision-making processes.

More information regarding the Company’s corporate governance, including a copy of our Corporate Governance Policy, is available in the “Investor Relations — Corporate Governance” section of our website, www.spartannash.com.

Director Independence

SpartanNash’s Corporate Governance Policy requires that at least two-thirds of the directors must be independent. Eight of our ten current directors are independent under Nasdaq Marketplace Rules.

Director Tenure

The Board of Directors considers the length of service of a director when determining whether he or she is “independent” under applicable rules.

Because the merger of Nash Finch and Spartan Stores in 2013 (the “Merger”) fundamentally transformed each constituent company and created a new, larger, and more complex organization, the Board believes it is appropriate to measure director tenure by reference to service to the combined company. The table below presents the approximate tenure of each non-management director and the average for the Board, measured with respect to the combined companies, and the “registrant.”

Director Tenure

Director

 

Years of Service

to SpartanNash

Company*

 

 

Years of Service

to “Registrant”**

 

M. Shân Atkins

 

 

7.4

 

 

 

17.8

 

Frank Gambino

 

 

7.4

 

 

 

17.8

 

Doug Hacker

 

 

7.4

 

 

 

7.4

 

Yvonne Jackson

 

 

7.4

 

 

 

10.5

 

Matthew Mannelly

 

 

3.1

 

 

 

3.1

 

Elizabeth Nickels

 

 

7.4

 

 

 

20.8

 

Hawthorne L. Proctor

 

 

7.4

 

 

 

7.4

 

William Voss

 

 

7.4

 

 

 

7.4

 

Average

 

 

6.9

 

 

 

11.5

 

* Since the merger of Spartan Stores and Nash Finch on November 19, 2013 through the date of this proxy statement.

** Service only to SpartanNash Company (f/k/a Spartan Stores, Inc.), which is the “registrant” for SEC reporting purposes.

The Board engages in self-evaluation annually, using two processes in alternate years. In one year, the Board evaluates and assesses Committee performance and overall Board performance. In the alternate year, the Board conducts a peer review process of individual directors. The Board believes that these processes help promote a culture of objective and robust discussion and deliberation.

The Board of Directors’ Role in Risk Oversight

Management of risk is the direct responsibility of the Company’s senior leadership team. The Board of Directors is responsible for overseeing the Company’s risk management and risk mitigation. In its oversight of the Company’s risk-management process, the Board seeks to ensure that the Company is informed and deliberate in its risk-taking. The Company’s primary mechanisms for risk management are the Company’s enterprise risk management program (“ERM”), its internal audit program, strategic review sessions held between the Board and management, and the Company’s external audit by an independent accounting firm.

The Board of Directors regularly analyzes the Company’s strategic plan and objectives with management. As part of this process, the Board and management identify and assess strategic risks attendant to initiatives such as acquisitions and divestitures, major investments, financings and capital commitments.

 

8

SpartanNash Company Proxy Statement

 


 

CORPORATE GOVERNANCE PRINCIPLES (cont’d)

 

 

The Board implements its risk oversight function both as a whole and through Committees, which meet regularly and report back to the full Board. In particular:

 

The Audit Committee oversees risks related to the Company’s financial statements, the financial reporting process, accounting, cybersecurity and legal matters. The Audit Committee oversees the Company’s internal audit and ethics programs, including the Company’s Code of Conduct. On a regular basis, the Audit Committee members meet independently with the Company’s head of internal audit and representatives of the independent auditing firm; and the Company’s Chief Financial Officer, Chief Accounting Officer and Legal Department.

 

The Compensation Committee evaluates the risks and rewards associated with the Company’s compensation philosophy and programs. The Compensation Committee reviews and approves compensation programs with features that mitigate risk without impairing the overall incentive nature of the compensation. The Compensation Committee also reviews senior leadership succession planning.

 

The Nominating and Corporate Governance Committee regularly reviews the Company’s governance structure and practices to promote the long-term interests of shareholders.

Board Leadership Structure

The Nominating and Corporate Governance Committee and the Board of Directors periodically evaluate the leadership structure of the Board of Directors in light of a variety of factors that the Board considers important, including the Company’s current Board composition, the experience and skills of our management team, continuity of leadership, and other factors.

The Board of Directors determined that while Mr. Eidson served as Interim Chief Executive Officer it was in the best interests of the Company and its shareholders to combine the roles of Chief Executive Officer and Chairman of the Board. Following the retention of Mr. Sarsam as Chief Executive Officer, the Board separated the roles of Chairman of the Board and Chief Executive Officer.  

The Board has elected a Lead Independent Director from among the independent directors. Presently, the Lead Independent Director is Douglas A. Hacker. The role of the Lead Independent Director is to aid and assist the Chairman and the rest of the Board in assuring effective corporate governance in managing the affairs of the Board and the Company.

Committee Charters

The Board has appointed three chartered committees: the Audit Committee, the Compensation Committee, and the Nominating and Corporate Governance Committee. The Board has approved a written committee charter for each of these committees. The charters define basic principles regarding each committee’s organization, purpose, authority and responsibilities. The charters for the Audit, Compensation, and Nominating and Corporate Governance Committees are available in the “Investor Relations — Corporate Governance” section of our website, www.spartannash.com.

Director Attendance

Each director is expected to make every effort to attend every Board meeting and every meeting of each Committee on which he or she serves as a member.

SpartanNash’s Board of Directors held the following meetings during 2020: twelve Board meetings; seven Audit Committee meetings; seven Compensation Committee meetings; and four Nominating and Corporate Governance Committee meetings. In 2020, each director attended at least 96% of the meetings of the Board of Directors and the committees on which he or she served. The Board is scheduled to meet at least quarterly and may meet more frequently. Independent directors meet in executive sessions, without the presence of management, at each regularly scheduled Board meeting.

Directors are also expected to attend the Annual Meeting unless compelling personal circumstances prevent attendance. All of the Company’s directors then in office attended the 2020 Virtual Annual Meeting.

 

9

SpartanNash Company Proxy Statement

 


 

CORPORATE GOVERNANCE PRINCIPLES (cont’d)

 

 

Hedging and Pledging Prohibited

The Board has adopted a policy that prohibits an executive officer or director of the Company from purchasing any financial instrument or entering into any transaction that is designed to hedge or offset any decrease in the market value of the Company’s common stock or other equity securities (including, but not limited to, prepaid variable forward contracts, equity swaps, collars, or exchange funds).

In addition, the Company’s executive officers and directors are not permitted to pledge, or otherwise encumber shares of the Company’s common stock or other equity securities as collateral for indebtedness. This prohibition includes, but is not limited to, holding such shares in a margin account. A copy of the Company’s Policy on Hedging and Pledging Company Stock is available in the “Investor Relations” section of our corporate website, www.spartannash.com.

Majority Voting Policy

Under the Company’s Corporate Governance Policy, it will be presumed that any director who receives a greater number of votes “withheld” than votes “for” such election in an uncontested election at an Annual Meeting (a “Majority Withheld Vote”) does not have the full confidence of the shareholders. A director receiving a Majority Withheld Vote is required to offer his or her resignation from the Board to the Nominating and Corporate Governance Committee upon certification of the shareholder vote. The resignation will be effective if and when accepted by the Nominating and Corporate Governance Committee, (excluding the affected director from consideration of and voting on acceptance of the resignation).

Change in Employment Status

A director who experiences a material change in his or her employment status is expected to promptly offer his or her resignation as a director to the Nominating and Corporate Governance Committee. The Committee will promptly consider and vote upon acceptance or rejection of the director’s offer to resign (excluding the affected director from consideration of and voting on acceptance of the resignation).

Other Board Memberships

Executive officers of the Company must notify the Nominating and Corporate Governance Committee before serving as a member of the board of directors of any other business organization. The Nominating and Corporate Governance Committee reviews the Chief Executive Officer’s membership on external boards of directors at least annually. The Chief Executive Officer may not serve on the board of directors of more than one business organization not affiliated with the Company without the prior review and approval of the Nominating and Corporate Governance Committee. The Committee may limit the directorships for any other executive officer if it believes that they will interfere with the executive officer’s responsibilities to the Company. Non-management directors may not serve on more than three other public company boards without the prior review and approval of the Nominating and Corporate Governance Committee.

Code of Conduct

The Audit Committee has approved a Code of Conduct (the “Code”) that articulates the Company’s standards regarding business ethics and expectations. The Code applies to all associates, officers, and members of the Board of Directors. The Code establishes guidelines to help the Company conduct our business with honesty and integrity and in compliance with applicable law. The Code requires all associates of the Company to report promptly any violations of the Code. Associates may report violations through reporting systems on a confidential and anonymous basis. The Code is available in the “Investor Relations — Corporate Governance” section of our website, www.spartannash.com. We intend to satisfy the disclosure requirements regarding any amendment to, or waiver from, a provision of the Code of Conduct by making disclosures concerning such matters available on the Investor Relations page of our website.

 

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SpartanNash Company Proxy Statement

 


 

CORPORATE GOVERNANCE PRINCIPLES (cont’d)

 

 

Cyber Security

The Audit Committee provides assistance to the Board of Directors in fulfilling its responsibilities with respect to the oversight of cybersecurity, data security, and the response to security breaches. Senior leadership reports to the Committee quarterly on the Company’s management of cybersecurity risk. The Company has adopted the NIST Cyber Security Framework and is independently audited on the Company’s implementation of the framework. The Company validates associate awareness of cyber security by periodically sending phishing emails to its associates. Any associate who fails the phishing test is required to re-take Cyber Security awareness training.

Succession Planning

Under our Corporate Governance Policy, the Board of Directors maintains and periodically reviews a succession plan for the Company’s Chief Executive Officer and such other executive officers as it deems appropriate to manage the continuity of leadership in the execution of the Company’s business strategies. The succession plans are based upon recommendations of the Compensation Committee.

Board and Management Communication

SpartanNash is committed to open and effective communication between the Board and management. Directors are encouraged to consult with any SpartanNash manager or associate and may visit Company facilities without the approval or presence of corporate management. The Board is required to dedicate a substantial portion of at least one meeting per year to discussions with management regarding the Company’s strategic plan.

Director Education

SpartanNash encourages all its directors to attend continuing education programs so that they may stay abreast of developments in corporate governance and best practices and further develop their expertise. The Board of Directors expects that each director will attend periodically an appropriate continuing director education program.

Nominee Qualifications and the Nominations Process

There are no specific or minimum qualifications or criteria for nomination for election or appointment to the Board of Directors. The Nominating and Corporate Governance Committee identifies and evaluates nominees for director on a case-by-case basis, regardless of who recommended the nominee, and has no written procedures for doing so. The Board has identified certain qualifications, attributes and skills that should be represented on the Board as a whole. These are discussed beginning on page 18.

The Nominating and Corporate Governance Committee may engage and pay fees to third party search firms to assist in identifying possible nominees for director and providing information to assist the Committee in the evaluation of possible nominees.

The Board of Directors expects that there would be no material difference in the manner in which the Nominating and Corporate Governance Committee would evaluate a nominee for director that was recommended by a shareholder.

Board Diversity

The Board believes that the Company and its shareholders are best served by having a Board of Directors that has a diversity of perspectives, education, experience, skills, gender, race, and ethnicity, and will endeavor to seek out such candidates when searching for new directors. Currently:

 

Two of our directors are African-American; and

 

Three of our directors are women.

 

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SpartanNash Company Proxy Statement

 


 

CORPORATE GOVERNANCE PRINCIPLES (cont’d)

 

 

 

Shareholder Communications with Directors

Shareholders who wish to send communications to SpartanNash’s Board of Directors may do so by sending them in care of the Secretary at the address set forth on the Notice of Meeting included in this proxy statement. Communications may be addressed either to specified individual directors or the entire Board. The Secretary has the discretion to screen communications that are unrelated to the business or governance of SpartanNash, or otherwise inappropriate. The Secretary will, however, compile all shareholder communications which are not forwarded and such communications will be available to any director. A copy of our Shareholder Communication Policy can be found in the “Investor Relations–Corporate Governance” section of our website, www.spartannash.com.

 

 

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SpartanNash Company Proxy Statement

 


 

CORPORATE RESPONSIBILITY

 

 

 

Corporate Responsibility

SpartanNash understands that environmental, social and governance issues are of increasing importance to many investors. The Company’s business decisions, products and operations have a direct impact on the environment and on communities, customers and associates. The Company’s social responsibility and environmental sustainability programs together make up the broader SpartanNash Corporate Responsibility commitment.

The Company believes it has made progress in each of five focus areas — cultivating local relationships and product development, advancing diversity and inclusion, volunteering, minimizing waste and reducing energy consumption.

For more information, including a copy of the Company’s Corporate Responsibility Report, please visit www.spartannash.com/corp-responsibility/.

 

 

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SpartanNash Company Proxy Statement

 


 

BOARD OF DIRECTORS

 

 

 

General

All directors elected at this year’s Annual Meeting will serve a one-year term, expiring at the 2022 Annual Meeting.

The biographies of each of the nominees below contain information regarding the person’s service as a director, business experience, director positions held currently or at any time during the last five years, and the experiences, qualifications, attributes or skills that caused the Nominating and Corporate Governance Committee and the Board to determine that the person should continue to serve as a director for the Company. Except as otherwise indicated, each of these persons has had the same principal position and employment for over five years.

Nominees for Directors

 

M. Shân Atkins (age 64) has been a director of SpartanNash since 2003. She is an independent business executive with extensive experience in finance, private investment, and retail strategy. Ms. Atkins is a director of Darden Restaurants, Inc., an owner and operator of full service restaurants, where she serves on the Audit and Nominating/Governance Committees; Aurora Cannabis, a leading Canadian integrated cannabis producer, where she chairs the Audit Committee and is a member of the Compensation Committee; Until March 2021, Ms. Atkins served as a director of LSC Communications. LSC Communications filed a voluntary petition for reorganization under Chapter 11 of the U.S. Bankruptcy Code in April 2020. She also formerly served as a director of SunOpta, Inc., a manufacturer of natural and organic beverages and snacks, until 2019; The Pep Boys — Manny, Moe and Jack, until 2015, Tim Hortons, Inc. until 2014, and Shoppers Drug Mart until 2012. Ms. Atkins formerly served as chair of the Audit Committee and a member of the Compensation Committee at True Value Company, a retailer-owned hardware cooperative. Ms. Atkins previously served as a partner in the global consumer and retail practice at Bain & Company, an executive with Sears Roebuck & Company, and an accountant with Price Waterhouse. She is a certified public accountant. Ms. Atkins’ qualifications to serve on the Board of Directors include her expertise in finance and accounting, her extensive experience as a director of other publicly traded corporations, and her experience in developing and executing strategic plans for major retail organizations.

 

 

 

 

Dr. Frank M. Gambino (age 67) has been a director of SpartanNash since 2003. Dr. Gambino is a Professor of Marketing and the Director of the Food & Consumer Package Goods Marketing Program at Western Michigan University. He is the immediate past Chair of the Food Industry University Coalition for the National Grocers Association and a member of the Higher Education Council for the Category Management Association. Prior to joining WMU, Gambino spent more than 15 years in the retail food industry, and he remains active within the food and consumer packaged goods industries at both the national and regional level. Currently, he serves on the Retail Site Development Committee for Wakefern Food Corporation, a grocery retailer cooperative. Mr. Gambino’s qualifications as a director include his extensive experience in food marketing and the retail food industry.

 

 

 

 

 

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SpartanNash Company Proxy Statement

 


 

THE BOARD OF DIRECTORS (cont’d)

 

 

 

Douglas A. Hacker (age 65) has been a Director of SpartanNash since November 2013 and was a director of Nash Finch from 2005 until the Merger. Mr. Hacker is currently an independent business executive and has served on a variety of boards of directors since 2005. He retired as a senior executive of United Airlines in 2006. He served as Executive Vice President, Strategy for UAL Corporation, the airline’s holding company, from December 2002 to May 2006. Prior to that position, he served with UAL Corporation as President, UAL Loyalty Services from September 2001 to December 2002, and as Executive Vice President and Chief Financial Officer from July 1999 to September 2001. Earlier in his career Mr. Hacker served in a variety of finance and planning roles at American Airlines.

 

Mr. Hacker serves as a director of Aircastle Limited, a commercial aircraft leasing company and serves as Chair of Columbia Funds, a mutual fund complex advised by Columbia Threadneedle Investments. He previously served as a director of Travelport Worldwide Limited from 2016 to 2019 and served as a director of SeaCube Container Leasing Ltd from 2010 until 2014. Mr. Hacker earned his A. B. magna cum laude from Princeton University and an M.B.A. from Harvard Business School. The Company believes that Mr. Hacker’s extensive experience in financial and operating management, including his prior service as Executive Vice President, Strategy, and his service as Chief Financial Officer of a major airline, in addition to his depth of knowledge of executive compensation give him the qualifications and skills to serve as a Director.

 

 

 

 

Yvonne R. Jackson (age 71) has been a director of SpartanNash since her appointment to the Board in October 2010. Ms. Jackson is President and Principal of BeecherJackson, Inc., a human resources management consulting firm that she co-founded in 2006. From 2002 to 2005, she served as Senior Vice President, Corporate Human Resources of Pfizer, Inc. From 2006 to 2012, Ms. Jackson served as a director of Winn-Dixie Stores, Inc., a regional grocery retailer, including service as chairperson of Winn Dixie’s Compensation Committee. Ms. Jackson is a former director and member of the Compensation and Nominating and Corporate Governance Committees of Best Buy Co., Inc. Ms. Jackson has over 30 years of experience in human resources, including experience as the most senior human resources executive. Her experience enables her to assist the Board in its deliberations regarding succession planning, compensation and benefits, change management, talent management, organizational management and diversity strategies.

 

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SpartanNash Company Proxy Statement

 


 

THE BOARD OF DIRECTORS (cont’d)

 

 

 

 

 

 

Matthew Mannelly (age 63) has been a director of SpartanNash since February 27, 2018. Mr. Mannelly is the retired Chief Executive Officer of Prestige Brands, Inc., a distributor of healthcare and household cleaning products, a position he held from 2009 to 2015. He also served on the board of directors of Prestige Brands. Before that, he was the Chief Executive Officer of Cannondale Bicycle Corporation from 2003 to 2008, and also served as a director of Performance Sports Group from 2015 to 2017. Mr. Mannelly also served as President, Americas for Paxar Corporation, Chief Marketing Officer for the United States Olympic Committee, and Global Director, Retail Development for NIKE, Inc. Mr. Mannelly is a member of the board of directors of Collier Creek, LLC. Mr. Mannelly’s qualifications as a director include his extensive experience in marketing and his executive leadership of consumer product and consumer goods companies.

 

 

 

 

Elizabeth A. Nickels (age 58) has been a director of SpartanNash since 2000. Ms. Nickels is an accomplished senior executive and board member with extensive leadership experience in both emerging and mature business segments. Ms. Nickels served as Executive Director of Herman Miller Foundation from 2012 to 2014. From February 2000 to May 2012, Ms. Nickels served as an executive at Herman Miller, Inc., an office furniture manufacturing company. Ms. Nickels served as Chief Financial Officer of Herman Miller from February 2000 to August 2007 and President of Herman Miller Healthcare from 2007 to 2012. Since October 2015, Ms. Nickels has served as a director of Principal Funds, a leading provider of mutual funds. Ms. Nickels served as a director of PetSmart, Inc. from November 2013 to March 2015, and was a director for Charlotte Russe, a clothing retailer, from November 2013 to April 2016, in addition to serving on the board of several privately held companies. Ms. Nickels has practiced as a certified public accountant and maintains her registration as a C.P.A. Ms. Nickels’ qualifications to serve as a director of SpartanNash include her wealth of experience and knowledge of business, finance and accounting matters gained through 27 years of executive experience with publicly traded companies.

 

 

 

 

Major General (Ret.) Hawthorne L. Proctor (age 74) has been a Director of the Company since the Merger and served as a director of Nash Finch since 2007. Major General (Ret.) Proctor currently serves as Managing Partner of Proctor & Boone LLC Consulting, and Senior Logistics Consultant in the Department of Defense Business Group of Intelligent Decisions, Inc., where he has worked since 2006. Major General (Ret.) Proctor served for nearly 35 years in the United States Army, where he performed with distinction in numerous senior logistics management roles including Commander, Defense Personnel Support Center and later Commander, Defense Supply Center, Philadelphia, 46th Quartermaster General of the United States Army, and J3, or Chief Operating Officer Defense Logistics Agency. The Company believes that Major General (Ret.) Proctor’s extensive service with the military as a logistician, and his prior leadership of a $3.2 billion enterprise that provided food, clothing and medical supplies to Department of Defense organizations give him the qualifications and skills to serve as a Director.

 

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SpartanNash Company Proxy Statement

 


 

THE BOARD OF DIRECTORS (cont’d)

 

 

 

 

 

 

Tony B. Sarsam (age 58) was named President and Chief Executive Officer in September 2020 and has served as a director since such time. Mr. Sarsam has three decades of leadership experience in the food industry and has a deep understanding of every facet of the consumer-packaged goods and food distribution business. Previously, Mr. Sarsam led Borden Dairy Company, Inc. (“Borden”) as Chief Executive Officer from March 2018 to July 2020, where he focused on developing a people-first culture and a renewed commitment to innovation and service. In January 2020, Borden filed a voluntary petition for reorganization under Chapter 11 of the U.S. Bankruptcy Code. In June 2020, the bankruptcy court approved the sale of substantially all of the assets of Borden to a group led by Capitol Peak Partners. Before joining Borden, Mr. Sarsam served as Chief Executive Officer of Ready Pac Foods. Prior to leading Ready Pac, Mr. Sarsam was President of the Nestlé USA Direct Store Delivery Company, which served the Nestlé frozen pizza and ice cream businesses. He also served as Executive Vice President of Sales and Operations at Dreyer’s, which was acquired by Nestlé. Mr. Sarsam began his career at PepsiCo, where he started as an associate engineer and progressed through a series of leadership roles, including Plant Manager, Director of Finance and Region Vice President for Sales and Distribution in the West. Mr. Sarsam holds a Bachelor of Science, Engineering degree in Chemical Engineering from Arizona State University and a Master of Science in Management from Stanford.

 

 

 

 

William R. Voss (age 67) has served as a director of the Company since the Merger. From 2006 until the Merger, Mr. Voss was the Chairman of the Nash Finch Board of Directors. Mr. Voss has served for more than 10 years as Managing Director of Lake Pacific Partners, LLC, a private equity investment firm specializing in consumer products and services. He previously served as Chairman and Chief Executive Officer of Natural Nutrition Group, Inc., a food processor; as Chief Executive Officer of McCain Foods, Inc.; and as President and a Director of Pilgrim’s Pride Corporation. The Company believes that Mr. Voss’ extensive experience as an entrepreneur, executive, consultant, investor and director in the consumer products industry, as well as his experience serving as Chairman, President and Director of Fortune 500 companies, gives him the qualifications and skills to serve as a Director.

Retiring Director

 

 

 

 

Dennis Eidson (age 67) has been a director of SpartanNash since October 2007. Mr. Eidson served as Chief Executive Officer of SpartanNash from October 2008 until his retirement in May 2017. He returned to serve as Interim President and Chief Executive Officer in August 2019 and filled that role until September 21, 2020. He previously served as Chief Operating Officer from February 2007 to October 2008 and as Executive Vice President Marketing and Merchandising from March 2003 to February 2007. Prior to joining SpartanNash, Mr. Eidson served as the Divisional President and Chief Executive Officer of A&P’s Midwest region from October 2000 to July 2002, as the Executive Vice President Sales and Merchandising of A&P’s Midwest region from March 2000 to October 2000, and as the Vice President of Merchandising of A&P’s Farmer Jack division from June 1997 to March 2000. Mr. Eidson brings valuable insight and knowledge to the Board due to his service as President and Chief Executive Officer. Mr. Eidson also provides the benefit of his years of service in the grocery retail and distribution industry, including his executive experience at A&P.

 


 

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SpartanNash Company Proxy Statement

 


 

THE BOARD OF DIRECTORS (cont’d)

 

 

 

Qualifications, Attributes, Skills and Experience to be Represented on the Board as a Whole

The Company’s core businesses include distributing grocery products to a diverse group of independent and chain retailers, its corporate owned retail stores, and military commissaries and exchanges. Grocery retailing and food distribution is a highly competitive and dynamic business. Accordingly, the Board of Directors believes that at least some of our directors should have experience or specific knowledge in retail or distribution industries at the executive level. The Board believes that directors with experience or in-depth knowledge of the grocery or food industries are uniquely qualified to inform the Board’s deliberations regarding business strategy. The Board has also found it valuable to have a member with specific knowledge and experience with distribution and logistics. Because merchandising and marketing is central to our business, the Board believes that merchandising and marketing experience should be represented on the Board. In addition, the Board believes that its membership should include directors who have:

 

a high degree of financial expertise;

 

experience with human resources matters;

 

strategic planning skills;

 

relevant business experience as a chief executive officer or equivalent; and

 

diverse perspectives, education, experience, skills, gender, race, and ethnicity.

Board Committees

SpartanNash’s Board has three standing committees:

 

the Audit Committee;

 

the Compensation Committee; and

 

the Nominating and Corporate Governance Committee.

 

 

 

Meetings Held in 2020

Full Board of Directors

 

12

Audit Committee

 

7

Compensation Committee

 

7

Nominating and Corporate Governance Committee

 

4

Audit Committee. The Board of Directors has established the Audit Committee to assist the Board in fulfilling its fiduciary responsibilities with respect to accounting, auditing, financial reporting, internal controls and legal compliance. The Audit Committee oversees management and the independent auditors in the Company’s accounting and financial reporting processes and audits of the Company’s financial statements. The Audit Committee serves as a focal point for communication among the Board, the independent auditors, the internal auditors and management with regard to accounting, reporting, and internal controls.

The Audit Committee operates under a charter adopted by the Board of Directors. A copy of the Audit Committee Charter is available in the “Investor Relations — Corporate Governance” section of our website, www.spartannash.com.

The Board of Directors has determined that Audit Committee members M. Shân Atkins and Elizabeth A. Nickels are Audit Committee financial experts, as that term is defined in Item 401(h)(2) of Securities and Exchange Commission Regulation S-K. Under SEC regulations, a person who is determined to be an Audit Committee financial expert will not be deemed an expert for any other purpose, including without limitation for purposes of Section 11 of the Securities Act of 1933, as amended (the “Securities Act”) as a result of being designated or identified as an Audit Committee financial expert, and the designation or identification of a person as an Audit Committee financial expert does not impose on such person any duties, obligations or liability that are greater than the duties, obligations and liability imposed on such person as a member of the Audit Committee and Board of Directors in the absence of such designation or identification or affect the duties, obligations or liability of any other member of the Audit Committee or Board of Directors.

 

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SpartanNash Company Proxy Statement

 


 

THE BOARD OF DIRECTORS (cont’d)

 

 

Each member of the Audit Committee is independent, as that term is defined in Rule 5605(a)(2) of the Nasdaq Listing Rules and Rule 10A-3 under the Exchange Act.

Compensation Committee. The Board of Directors has established the Compensation Committee to assist the Board of Directors in fulfilling its responsibilities relating to compensation of the Company’s executive officers and the Company’s compensation and benefit programs and policies. The Compensation Committee operates under a charter adopted by the Board of Directors. A copy of the Compensation Committee Charter is available in the “Investor Relations — Corporate Governance” section of our website, www.spartannash.com.

Each member of the Compensation Committee is independent, as that term is defined in Rule 5605(a)(2) of the Nasdaq Listing Rules and Rule 10C-1 under the Exchange Act.

Processes and Procedures. The Compensation Committee reviews executive compensation on a continuous basis each year, with the most comprehensive reviews typically taking place following year-end. The Committee reviews executive performance, current compensation levels, and compensation benchmarking data and analysis (please see the Compensation Discussion and Analysis section of this Proxy Statement for information about benchmarking analysis). The Committee reviews this information in the context of the Company’s performance and financial results. At the conclusion of this review, the Compensation Committee grants share-based awards if appropriate, establishes goals and objectives for the then-current year, and may adjust executive salaries. The Compensation Committee’s decision-making process is explained in more detail in the Compensation Discussion and Analysis section of this proxy statement.

Consultants and Advisors. The Compensation Committee is authorized to engage consultants, advisors and legal counsel at the expense of the Company. The Compensation Committee Charter requires that any consultant engaged for the purpose of determining the compensation of executive officers must be engaged directly by the Committee and report to the Compensation Committee. The Compensation Committee has authority to approve contracts with and payment of fees and other compensation of consultants, advisors and legal counsel.

Prior to engaging or receiving advice from any compensation consultant or advisor, the Committee reviews the independence of the proposed consultant or advisor, taking into account the following factors:

 

The advisor’s provision of other services to the Company;

 

The amount of fees received from the Company by the advisor, as a percentage of the advisor’s total revenue;

 

The advisor’s policies and procedures that are designed to prevent conflicts of interest;

 

Any business or personal relationship between the advisor and a member of the Committee or any executive officer of the Company;

 

The advisor’s ownership of any Company stock; and

 

Any other factors identified by applicable securities exchange listing standards.

Participation by Management. The Company’s compensation philosophy and the administration of its various compensation plans are determined by the independent directors of the Compensation Committee. Company policy and Nasdaq rules prohibit participation by the Chief Executive Officer in the process of determining his or her own compensation. The Company’s executive officers and Human Resources associates serve as resources to the Compensation Committee and provide advice, information, analysis and documentation to the Compensation Committee upon request. The Compensation Committee may delegate to the Chief Executive Officer authority to recommend the amount or form of compensation paid to other executive officers and associates subordinate to the Chief Executive Officer, subject to such limitations as the Compensation Committee may require. The Compensation Committee will not delegate to executive officers its authority to approve awards of stock options or other stock compensation.

 

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SpartanNash Company Proxy Statement

 


 

THE BOARD OF DIRECTORS (cont’d)

 

 

Share-based Award Policy. The Board of Directors has adopted a Policy Regarding Stock Option Grants and other share-based Awards which provides:

 

Share-based awards will not be back-dated.

 

The exercise price for all share-based awards will be based on the market value of SpartanNash common stock on the effective date of award;

 

The Company will not time its release of material non-public information for the purpose of affecting the value of executive compensation, or time the grant of compensation awards to take advantage of material non-public information; and

 

Only the Board of Directors or the Compensation Committee, which consists entirely of independent directors, will approve share-based awards. This authority may not be delegated to executive officers or associates.

A copy of the Policy Regarding Stock Option Grants and other Share-based Awards is available in the “Investor Relations — Corporate Governance” section of our website, www.spartannash.com.

Nominating and Corporate Governance Committee. The Board of Directors has established the Nominating and Corporate Governance Committee to assist the Board of Directors in fulfilling its responsibilities by providing independent director oversight of nominations for election to the Board of Directors and leadership in the Company’s corporate governance.

The Nominating and Corporate Governance Committee has the powers, authority and responsibilities specified in its charter or delegated to the committee by the Board of Directors. A copy of the Nominating and Corporate Governance Committee Charter is available in the “Investor Relations — Corporate Governance” section of our website, www.spartannash.com.

Under the Corporate Governance Policy, if the chair of the Board is also the current or former Chief Executive Officer of SpartanNash, the Board will elect a Lead Independent Director from among the directors who are independent under Nasdaq Listing Rule 5605(a)(2). The responsibilities and authority of the Lead Independent Director are described in this proxy statement under the caption “Board Leadership Structure.”

Each member of the Nominating and Corporate Governance Committee is “independent” as that term is defined in Rule 5605(a)(2) of the Nasdaq rules.

 

 

 

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SpartanNash Company Proxy Statement

 


 

INDEPENDENT AUDITORS

 

 

 

Independent Auditors’ Fees

The aggregate fees billed by Deloitte & Touche LLP to SpartanNash and its subsidiaries for 2020 and 2019 are as follows:

 

 

 

2020

 

 

 

2019

 

Audit Fees(1)

$

 

1,039,000

 

 

$

 

991,000

 

Audit-Related Fees(2)

 

 

130,000

 

 

 

 

210,000

 

Tax Fees(3)

 

 

183,673

 

 

 

 

45,000

 

All Other Fees

 

 

 

 

 

 

 

(1)

Audit services consist of the annual audit, reviews of quarterly reports on Form 10-Q and consultations.

(2)

Audit-related fees consist principally of services related to accounting consultations and audits in connection with acquisitions.

(3)

Permissible tax services include tax compliance, tax planning and tax advice that do not impair the independence of the auditors and that are consistent with the SEC’s rules on auditor independence. Tax compliance and preparation fees account for $12,400 and $12,000 of the total tax fees for 2020 and 2019, respectively.

Deloitte did not provide any services to SpartanNash or its subsidiaries related to financial information systems design and implementation during the past two years.

Audit Committee Approval Policies

The Audit Committee Charter sets forth the policy and procedures for the approval by the Audit Committee of all services provided by Deloitte. The charter requires that the Audit Committee pre-approve all services provided by the independent auditors, including audit-related services and non-audit services. The charter allows the Audit Committee to delegate to one or more members of the Audit Committee the authority to approve the independent auditors’ services. The decisions of any Audit Committee member to whom authority is delegated to pre-approve services are reported to the full Audit Committee. The charter also provides that the Audit Committee has authority and responsibility to approve and authorize payment of the independent auditors’ fees. Finally, the charter sets forth certain services that the independent auditors are prohibited from providing to SpartanNash or its subsidiaries. All of the services described above were approved by the Audit Committee. None of the audit-related fees or tax fees were approved by the Audit Committee pursuant to the de minimus exception set forth in Section 10A(i)(1)(B) of the Exchange Act, although the Audit Committee Charter allows such approval.

 

 

 

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SpartanNash Company Proxy Statement

 


 

AUDIT COMMITTEE REPORT

 

 

 

The Board of Directors has appointed the Audit Committee to assist the Board in fulfilling its fiduciary responsibilities with respect to accounting, auditing, financial reporting, internal controls, and legal compliance. The Committee oversees management and the independent public accounting firm in the Company’s accounting and financial reporting processes and audits of the Company’s financial statements. The Committee serves as a focal point for communication among the Board, the independent public accounting firm, the internal auditors and management with regard to accounting, reporting, and internal controls.

The Committee acts under a charter which has been adopted by the Board of Directors and is available on the Company’s website at www.spartannash.com. The Audit Committee reviews the adequacy of the charter at least annually. The Board of Directors annually reviews the standards for independence for audit committee members under the Nasdaq Listing Rules and has determined that each member of the Audit Committee is independent. The Board of Directors has also determined that two members of the Audit Committee are audit committee financial experts under Securities and Exchange Commission rules.

Management of the Company is responsible for the preparation, presentation and integrity of the Company’s financial statements, the Company’s accounting and financial reporting, the Company’s disclosure controls and internal control over financial reporting, and procedures designed to assure compliance with accounting standards and applicable laws and regulations. The independent public accountants are responsible for auditing the Company’s financial statements, expressing an opinion as to their conformity with generally accepted accounting principles, and providing an attestation report on the effectiveness of the Company’s internal control over financial reporting.

The Audit Committee has reviewed, and discussed with management and the independent accountants, the Company’s audited financial statements for the fiscal year ended January 2, 2021, management’s assessment of the effectiveness of the Company’s internal control over financial reporting, and the independent accountants’ attestation report on the Company’s internal control over financial reporting. The Audit Committee has discussed with the independent accountants the matters required to be discussed under applicable auditing standards. The Audit Committee has received the written disclosures and the letter from the independent accountants required by applicable requirements of the Public Company Accounting Oversight Board regarding the independent accountant’s communications with the Audit Committee concerning independence and has discussed with the independent accountants their independence. This included consideration of the compatibility of non-audit services with the accountants’ independence.

Based on the reviews and discussions described above, the Audit Committee recommended to the Board of Directors that the audited financial statements be included in SpartanNash’s report on Form 10-K for the period ended January 2, 2021.

Respectfully submitted,

M. Shân Atkins, Chair

Dr. Frank M. Gambino

Elizabeth A. Nickels

Hawthorne L. Proctor

The information contained in the “Audit Committee Report” is not considered to be “soliciting material,” “filed” or incorporated by reference in any past or future filing by the Company under the Exchange Act or the Securities Act unless and only to the extent that the Company specifically incorporates it by reference.

 

 

 

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SpartanNash Company Proxy Statement

 


 

OWNERSHIP OF SPARTANNASH STOCK

 

 

 

The following table sets forth the number of shares of SpartanNash common stock reported to be beneficially owned by each person or group which is known to the Company to be a beneficial owner of 5% or more of SpartanNash’s outstanding shares of common stock as of January 2, 2021, and each of our directors and nominees for director, each executive officer named in the Summary Compensation Table below and all directors, nominees for director and executive officers of SpartanNash as a group are deemed to have beneficially owned as of January 2, 2021. Information reported with respect to beneficial owners other than SpartanNash nominees, directors, and officers is based entirely on the most recent Schedule 13G or amendment filed by the listed party as of March 29, 2021, and the Company assumes no responsibility for such reports. Ownership of less than 1% of the outstanding shares of common stock is indicated by asterisk.

Name of Beneficial Owner

 

Sole

Voting

Power

 

 

Sole

Dispositive

Power

 

 

Shared Voting

or Dispositive

Power

 

 

Total

Beneficial

Ownership

 

 

Percent

of

Class(1)

 

5% Owners

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

BlackRock Inc.(2)

 

 

5,715,029

 

 

 

5,789,054

 

 

 

 

 

 

5,789,054

 

 

 

16.1

%

Dimensional Fund Advisors LP(3)

 

 

2,751,067

 

 

 

2,858,470

 

 

 

 

 

 

2,858,470

 

 

 

8.0

%

The Vanguard Group(4)

 

 

 

 

 

2,422,899

 

 

 

82,859

 

 

 

2,505,758

 

 

 

7.0

%

Nominees, Directors, and Officers

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

M. Shân Atkins

 

 

36,112

 

 

 

36,112

 

 

 

 

 

 

36,112

 

 

*

 

Dennis Eidson

 

 

205,647

 

 

 

205,647

 

 

 

2,400

 

 

 

208,047

 

 

*

 

Dr. Frank M. Gambino

 

 

41,879

 

 

 

41,879

 

 

 

 

 

 

41,879

 

 

*

 

Douglas A. Hacker

 

 

43,690

 

 

 

43,690

 

 

 

 

 

 

43,690

 

 

*

 

Yvonne R. Jackson

 

 

30,006

 

 

 

30,006

 

 

 

 

 

 

30,006

 

 

*

 

Walt Lentz

 

 

28,099

 

 

 

28,099

 

 

 

 

 

 

28,099

 

 

*

 

Kathleen M. Mahoney

 

 

76,188

 

 

 

76,188

 

 

 

 

 

 

76,188

 

 

*

 

Matthew Mannelly

 

 

18,687

 

 

 

18,687

 

 

 

 

 

 

18,687

 

 

*

 

Elizabeth A. Nickels

 

 

40,441

 

 

 

40,441

 

 

 

 

 

 

40,441

 

 

*

 

Hawthorne L. Proctor

 

 

29,041

 

 

 

29,041

 

 

 

 

 

 

29,041

 

 

*

 

Lori Raya

 

 

23,939

 

 

 

23,939

 

 

 

 

 

 

23,939

 

 

*

 

Tony Sarsam

 

 

22,312

 

 

 

22,312

 

 

 

 

 

 

22,312

 

 

*

 

Mark Shamber

 

 

54,914

 

 

 

54,914

 

 

 

 

 

 

54,914

 

 

*

 

Yvonne Trupiano

 

 

37,787

 

 

 

37,787

 

 

 

 

 

 

37,787

 

 

*

 

William R. Voss

 

 

38,305

 

 

 

38,305

 

 

 

 

 

 

38,305

 

 

*

 

All directors, nominees and executive officers

   as a group (19 persons)

 

 

794,840

 

 

 

794,840

 

 

 

2,400

 

 

 

797,240

 

 

 

1.8

%

 

(1)

The percentages set forth in this column were calculated on the basis of 35,850,538 shares of common stock outstanding as of January 2, 2021. For SpartanNash nominees, officers, and directors, the number of shares stated is based on information provided by each person listed and includes shares personally owned by the person and shares which, under applicable regulations, are considered to be otherwise beneficially owned by the person as of January 2, 2021. These numbers include shares over which the listed person is legally entitled to share voting or dispositive power by reason of joint ownership, trust or other contract or property right, and shares held by spouses, children or other relatives over whom the listed person may have influence by reason of relationship.

 

(2)

Based on a Schedule 13G/A filed January 25, 2021 by BlackRock, Inc., 55 East 52nd Street, New York, NY 10055.

(3)

Based on a Schedule 13G/A filed February 16, 2021 by Dimensional Fund Advisors LP, 6300 Bee Cave Road, Building One, Austin, TX 78746.

(4)

Based on a Schedule 13G/A filed February 10, 2021 by The Vanguard Group, Inc., PO Box 2600, V26, Valley Forge, Pennsylvania, 19482-2600.

 

 

 

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SpartanNash Company Proxy Statement

 


 

SPARTANNASH’S EXECUTIVE OFFICERS

 

 

 

SpartanNash’s executive officers are appointed annually by, and serve at the pleasure of, the Board or the Chief Executive Officer.

Biographical information for Messrs. Eidson and Sarsam and are included above in the “Board of Directors” section of this proxy statement. The following sets forth biographical information as of the date of this proxy statement concerning SpartanNash’s executive officers who are not directors:

Arif Dar (age 52) has served as Senior Vice President and Chief Information Officer since January 2019. Previously, he was the Chief Information Officer for S.C. Johnson and Son, Inc. (“SCJ”) from 2015 to 2018. Prior to that, he served as the Chief Technology Officer for SCJ from 2013 to 2015. He has also held executive Information Technology positions at Maple Leaf Foods, Bombardier Transportation, General Motors, Tyco International and General Electric.

Tammy R. Hurley (age 55) has served as Vice President, Finance and Chief Accounting Officer since August 2016. Prior to her promotion to that position, she served as SpartanNash’s Vice President Finance from February 2015 to August 2016, Director, Accounting from 2010 to 2015, and Corporate Controller from 2001 to 2010. Prior to joining SpartanNash she was an auditor with Deloitte & Touche. She is a Certified Public Accountant.

Kathleen M. Mahoney (age 66) has served as Chief Legal Officer since November 2015, and corporate Secretary since the Merger. She previously served as President MDV from May 2017 to February 2021 and Executive Vice President General Counsel from the Merger to November 2015. As Chief Legal Officer, Ms. Mahoney oversees the Company’s legal and aviation functions. Prior to the Merger, she served as Executive Vice President General Counsel and Secretary for Nash Finch, where she oversaw legal, aviation, risk management, asset protection, safety, environmental, and insurance procurement and claims management. Prior to working at Nash Finch, she was the Managing Partner of the St. Paul office of Larson King, LLP.

Jason P. Monaco (age 44) has served as Executive Vice President Chief Financial Officer since March 2021. Previously, Mr. Monaco served as the Chief Financial Officer of Cornerstone Chemical Company, a global producer of intermediate chemicals since August 2020, and previously served as Chief Financial Officer of Borden Dairy Co. from December 2018 until August 2020, where he led Borden Dairy through the completion of its financial restructuring in a bankruptcy reorganization. Mr. Monaco also served as Vice President and Group Chief Financial Officer of Celanese Corporation from September 2017 until December 2018. He was Vice President, Finance & Treasurer of Arrow Electronics from 2014 until 2016. He began his career with Kimberly Clark as a Financial Analyst in 1998 and advanced through the organization, holding finance positions of increasing responsibility, including as chief financial officer of its South Asia business and as a group chief financial officer for the healthcare and B2B divisions.

Lori Raya (age 54) has served as Executive Vice President Chief Merchandising and Marketing Officer since February 2019. Previously, Ms. Raya held the position as Division President of Albertsons from 2015 to 2018, where she led the post-merger transition with Safeway. Ms. Raya’s career extended over 30 years with Safeway, holding various titles such as Vice President of Retail Operations, Group Vice President of Strategic Initiatives, and multiple food category senior management positions before serving as the first female divisional president in Vons from 2012 to 2015.

David Sisk (age 60) has served as MDV President and a SpartanNash Senior Vice President since February 2021. Immediately prior to joining SpartanNash, he served as Executive Director of Gloo, LLC from September 2019 through January 2020. He served as the Director, Church Advancement at Christ Fellowship from July 2018 through July 2019. David also served as the President and Chief Operating Officer for OSC-WEBco from January 2016 to June 2018, where he was responsible for worldwide strategic plans, financial performance, personnel and global operations across all military divisions. Prior to that, he has held various responsibilities throughout his 30-year career with Procter & Gamble, culminating in serving as Customer Business Development Manager for the Global Military Division. Mr. Sisk has also previously served as Chair of the American Logistics Association (ALA) and is a recipient of the ALA’s Lifetime Achievement Award.

 

24

SpartanNash Company Proxy Statement

 


 

SPARTANNASH’S EXECUTIVE OFFICERS (cont’d)

 

Tom Swanson (age 60) has served as Executive Vice President and General Manager, Corporate Retail since March 2021. He previously served as Senior Vice President and General Manger, Corporate Retail since October 2018 and Vice President, Retail Merchandising and Vice President of SpartanNash’s Retail-West operations prior to that. Mr. Swanson has held executive retail supermarket positions for over 30 years with Bashas' Markets and Nash Finch.

Yvonne Trupiano (age 42) has served as Executive Vice President and Chief Human Resources and Corporate Affairs and Communications Officer since March 2018. She joined the Company as Senior Vice President Chief Human Resources Officer in October 2016. Prior to joining SpartanNash, she served as Vice President Human Resources for Avis Budget Group, a global vehicle rental provider, from February 2013 to October 2016. She originally joined Avis Budget Group in 2004 and served in positions of increasing responsibility.

 

 

 

25

SpartanNash Company Proxy Statement

 


 

EXECUTIVE COMPENSATION

 

 

COMPENSATION DISCUSSION AND ANALYSIS

The Board of Directors has appointed the Compensation Committee to assist the Board of Directors in fulfilling its responsibilities relating to compensation of the Company’s executive officers and the Company’s compensation and benefit programs and policies. The Compensation Committee determines and implements the Company’s executive compensation philosophy, structure, policies and programs, and administers and interprets the Company’s compensation and benefit plans.

Our compensation programs are designed to attract and retain leadership talent consistent with our performance goals. The following discussion provides information regarding the achievements that the compensation program is designed to reward, the elements of the compensation program, the reasons why we employ each element and how we determine amounts paid.

We are proud to report that our 2020 named executive officers (“NEOs” or “named executive officers”) include three women. Our NEOs for 2020 were:

 

Name

 

Title

Tony B. Sarsam

 

President and Chief Executive Officer1 ("CEO")

Dennis Eidson

 

Interim President and Chief Executive Officer2 ("CEO")

Mark Shamber

 

Executive Vice President and Chief Financial Officer3 ("EVP and CFO")

Kathleen M. Mahoney

 

Executive Vice President, President MDV, Chief Legal Officer and Secretary4 ("EVP and CLO")

Yvonne Trupiano

 

Executive Vice President and Chief Human Resources and Corporate Affairs and Communications Officer ("EVP and CHRO")

Lori Raya

 

Executive Vice President Chief Merchandising and Marketing Officer ("EVP and CMMO")

Walt Lentz

 

Former Executive Vice President, President Food Distribution5

 

 

(1) Mr. Sarsam has served as our President and Chief Executive Officer since September 21, 2020.

(2) Mr. Eidson served as our Interim President and Chief Executive Officer until September 20, 2020.

 

(3) Mr. Shamber ceased serving as our Executive Vice President and Chief Financial Officer on March 22, 2021.

(4) Ms. Mahoney ceased serving as our President MDV in February 2020.

(5) Mr. Lentz served as our Executive Vice President, President Food Distribution until December 2020 and is included because he would have been one of the Company’s three most highly compensated executive officers, other than an executive serving as principal executive officer or principal financial officer, if he were serving as an executive officer at the end of fiscal year 2020.

Objectives of SpartanNash’s Compensation Programs

The primary objectives of the Company’s compensation programs are to:

 

attract, retain, motivate, and reward talented executives who are critical to the current and long-term success of the Company;

 

provide an overall level of compensation opportunity that is competitive within the markets in which SpartanNash competes and within a broader group of companies of comparable size, financial performance, and complexity;

 

provide targeted compensation levels that are consistent with the 50th percentile of competitive market practices for each pay component (base salary, annual incentives, and long-term incentives);

 

support SpartanNash’s long-range business strategy;

 

reward and retain the Company’s executives and compensate for individual performance; and

 

align the interests of the executives with those of the shareholders by linking compensation to the Company’s performance.

 

 

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SpartanNash Company Proxy Statement

 


 

EXECUTIVE COMPENSATION

 

 

 

Pay Practices

The Compensation Committee also reviews the Company’s compensation programs to use best practices and avoid poor pay practices. Below is a summary of certain practices we have implemented to support our compensation philosophies, and certain practices we reject because we believe they do not serve our shareholders’ long-term interests.

The practices we follow:

We do NOT:

  At-risk compensation. A majority of the compensation paid to our named executive officers is “at-risk” and requires specific and disclosed financial performance, continued employment, or both;

 

  Pay for performance. All performance payouts for named executive officers are based on attainment of goals — both short-term and long-term metrics and targets;

 

  Double-trigger severance arrangements. Our severance agreements provide for double-trigger payments upon a change in control;

 

  Double-trigger equity vesting. Beginning in 2016, our equity incentive award agreements provide for double-trigger vesting of equity awards upon a change in control;

 

  Executive stock ownership and retention requirements. Each executive is required to hold at least 50% of the net shares (after taxes) acquired through the Company’s stock incentive plans and other forms of stock based compensation until the executive has achieved the required level of ownership; and

  Clawback policy. Incentive compensation paid to executives is subject to recovery in the event of certain financial restatements, materially inaccurate financial statements or performance metrics or executive misconduct.

  Provide guaranteed salary increases;

 

  Provide guaranteed bonuses;

 

  Allow hedging or pledging of Company stock by officers, directors, or associates;

 

  Provide excessive perquisites;

 

  Provide excise tax gross-ups in change in control agreements; or

 

  Allow repricing of options without shareholder approval.

Clawback Policy

The Company maintains a clawback policy providing that under certain circumstances, the Company may recover incentive compensation paid to any current or former associate holding a position of Vice President or a more senior position. The compensation is recoverable if: (a) there is a restatement of all or a portion of the Company’s financial statements due to material non-compliance with financial reporting requirements, (b) the incentive compensation was based on materially inaccurate financial statements or performance metrics, or (c) the associate engaged in ethical misconduct, serious wrongdoing, or violation of applicable legal or regulatory requirements. The Company may recover any incentive compensation paid within the three years prior to the applicable event or conduct.

 

27

SpartanNash Company Proxy Statement

 


 

EXECUTIVE COMPENSATION (cont’d)

 

How the Compensation Committee Determines Compensation Levels

The processes the Compensation Committee follows when determining pay levels are discussed in more detail below.

Overview

The Compensation Committee’s overall decision-making process is summarized as follows:

 

the Committee reviews recent trends and developments in executive compensation as provided by its independent compensation consultant, including salaries, short-term and long-term incentive plan targets and payouts, equity awards, and perquisites and benefits;

 

the Company’s executive officers, Human Resources, and Finance associates serve as resources to the Compensation Committee and provide advice, information, analysis and documentation to the Compensation Committee upon request;

 

the Committee reviews and analyzes data, including surveys and publicly available information compiled by the independent compensation consultant, to determine the median level of compensation for each type of compensation paid for comparable positions at comparable companies;

 

the Committee compares the compensation of the Company’s executives to compensation at the comparable companies in the context of the Company’s financial performance, economic conditions, and other factors; and

 

the Committee sets compensation opportunities for our executives to target generally the median levels for comparable companies, but makes adjustments for a number of considerations discussed below, including individual performance, company performance, past compensation, and other factors.

Market Benchmarking

In general, the Compensation Committee seeks to provide target compensation opportunities that are competitive with the market levels for each major category of compensation and in total for executives in similar positions at companies of comparable size, financial performance, industry and complexity. As part of this overall analysis, the Committee reviews survey data provided by its compensation consultants, and engages in benchmarking of selected companies (referred to as “Peer Group Companies”).

The Compensation Committee reviews the constituents of the Peer Group Companies from time to time to help ensure that the group is comparable to the Company. Changing business models, mergers, growth, and other factors may necessitate adjustments. The Peer Group Companies for 2020 were as follows:

The Andersons, Inc.

Performance Food Group Company

Anixter International Inc.

Schneider National, Inc.

BJ’s Wholesale Club Holdings, Inc.

United Natural Foods, Inc.

Core-Mark Holding Company, Inc.

Univar Solutions Inc.

Ingles Markets, Inc.

Veritiv Corporation

MRC Global Inc.

Weis Markets, Inc.

Owens & Minor, Inc.

WESCO International, Inc.

Patterson Companies, Inc.

 

As of October 2019 (the approximate time at which the Committee reviewed the data), Peer Company revenue, expressed as a multiple of the Company’s revenue, ranged from 0.4 to 2.7, with a median multiple of 1.0. Median market capitalization was $1.47 billion for the Peer Group Companies compared to $430 million for SpartanNash, and ranged from $291 million to $4.8 billion.

 

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SpartanNash Company Proxy Statement

 


 

EXECUTIVE COMPENSATION (cont’d)

 

In addition to determining the median level of an element of a compensation category among the Peer Group Companies, the Committee analyzes competitive compensation practices in the general industry for those positions that may be occupied by officers and executives recruited from outside of the wholesale and retail grocery business and performs regression analysis to adjust to SpartanNash’s revenue size in these cases.

Market levels serve only as a reference point; the Committee also considers:

 

individual performance;

 

time each executive has served in the position;

 

the experience of each executive;

 

future potential of the executive;

 

internal equity;

 

retention concerns; and

 

Company performance.

Evaluating Individual Performance

Each year, the Compensation Committee reviews and evaluates individual executive performance as part of its decision-making process. The Chairperson of the Compensation Committee coordinates the review of the individual performance of the Chief Executive Officer by the Board of Directors. The Chairman of the Board of Directors, when not serving as Chief Executive Officer or Interim Chief Executive Officer, helps ensure that the Chief Executive Officer’s performance objectives are appropriate. The Chairman of the Board of Directors, Lead Independent Director, and the Chair of the Compensation Committee communicate the Board of Directors’ review to the Chief Executive Officer.

For the named executive officers other than the Chief Executive Officer, the Chief Executive Officer reviews with the Compensation Committee an evaluation of each executive officer’s performance.

As discussed above, individual performance is only one factor among several that the Compensation Committee considers in making these adjustments, and there is no prescribed formula or mechanism for translating individual performance into specific amounts of compensation. The Compensation Committee’s decision-making process necessarily involves the Committee’s informed judgment with respect to individual executive performance in the context of many considerations and criteria, none of which are individually controlling, including experience, potential of the executive, retention concerns, recent compensation of the executive, internal pay equity, Company performance, and general industry and economic conditions.

Use of Independent Compensation Consultants

FW Cook is a compensation consulting firm that has provided such services to the Compensation Committee since 2019. In 2020, the Company paid FW Cook $181,252 for its executive compensation services. The Compensation Committee considered each of the factors required by NASDAQ in determining that FW Cook is an independent advisor.

 

29

SpartanNash Company Proxy Statement

 


 

EXECUTIVE COMPENSATION (cont’d)

 

The Compensation Committee instructs its independent consultants to provide advice and guidance on executive compensation proposals, including changes to compensation levels, the design of incentive plans and other forms of compensation, and to provide information about market practices and trends. Typically, the independent consultant attends one or two Compensation Committee meetings per year, reviews existing compensation programs for consistency with our compensation philosophy and current market practices, and produces comparative information derived from our peer group and published survey data. With respect to 2020, the activities of the independent consultants engaged by the Compensation Committee included:

 

performing a market review of executive officer compensation components;

 

reviewing our annual and long-term incentive plan design structure;

 

advising on the compensation terms for the extension of the Interim Chief Executive Officer’s service;

 

advising on the compensation package for the incoming President and Chief Executive Officer;

 

assisted with the preparation of the 2020 Stock Incentive Plan proposal;

 

reviewing current issues and trends in executive compensation; and

 

reviewing the pay-for-performance alignment of our executive compensation programs.

In addition to the elements of compensation discussed above, our executives participate in certain defined benefit and deferred compensation plans. These plans are discussed below under the captions “Pension Benefits,” “Qualified Defined Contribution Retirement Plan,” and “Non-Qualified Deferred Compensation.”

Mix of Compensation Elements

When determining the mix of awards, the Compensation Committee considers factors such as the short-term and long-term compensation expense to the Company, the economic value delivered to the executives, the overall level of share ownership by the executives, share availability under Company plans, annual share usage and dilution, and practices at the Peer Group Companies. The award mix (at target level) for 2020 for our new CEO, Mr. Sarsam, and average other NEO is presented below.  

 

 

 

          

Fixed – 20%        Variable – 80%                          Fixed – 36%        Variable – 64%

Pay for Performance

Our executive compensation elements and programs reflect our “pay for performance” philosophy. The Compensation Committee and the Board of Directors have implemented and intend to maintain compensation plans that link a substantial portion of executive compensation to the achievement of goals that the Board of Directors considers important.

 

30

SpartanNash Company Proxy Statement

 


 

EXECUTIVE COMPENSATION (cont’d)

 

2020 Strategic Objectives and Business Context

SpartanNash is a leading consumer-centric distributor and food retailer. The Company’s strategic objective is to achieve sustained profitable growth by developing and leveraging a national, highly efficient, and versatile distribution platform that services a diversified customer base.

COVID-19 Pandemic

The COVID-19 pandemic and the ensuing lockdowns brought the economy to a halt and altered consumer behavior, resulting in supply chain constraints but also unprecedented sales growth rates for our industry. SpartanNash’s response to the pandemic has been quick and comprehensive, focused on the well-being and safety of associates, customers and communities as well as supporting health officials and government leaders to contain the virus.

During 2020, our communities needed us more than ever, and our family of nearly 19,000 associates answered the call – all while balancing schedules, concerns for their own health and wellbeing as well as that of their family and friends, adjusting to a new normal at home, and for many, the impact of schools closed, childcare changes, and the absence of social events to de-stress. SpartanNash’s unwavering commitment to our family of associates who served on the frontline has been both tangible and visible. We proactively took steps to ensure our neighbors, customers, military families, and those most at risk received the essential food, medicine and groceries they needed during the pandemic.

Since the onset of COVID-19, our company has had two top priorities: the well-being and safety of our family of associates, customers and communities; and supporting health officials and government leaders to contain the virus. We have not wavered on either front.

In addition to our following the Centers for Disease Control and Prevention (CDC) guidelines and protocols for safety and prevention and redoubling our sanitation and deep cleaning efforts, some of the additional measures we implemented are:

 

Installed 36-square-inch clear plexiglass sneeze guards at every cashier station, deli counter, pharmacy, coffee kiosk, customer service center and fuel center check out as an added measure of safety for our family of associates and store guests.

 

Set aside shopping time twice per week for store guests most at risk of contracting coronavirus (COVID-19), including seniors, pregnant women and immunocompromised individuals.

 

Offered free, same-day home delivery of prescription medications from our pharmacies, beginning April 1.

 

Increased our Fast Lane ecommerce staff to accommodate the increased number of customers shopping online and requesting home delivery.

 

Launched an innovative pilot partnership with eight West Michigan restaurants

 

Proactively sought to hire displaced workers in all our communities.

 

Paid frontline bonus pay, offered expanded associate discount days and established the SpartanNash Hero Program to celebrate and thank our associates.

 

Offered up to 80 hours of paid emergency leave benefits to ensure associates who are sick or are displaying symptoms of COVID-19 are able to remain off work until they have fully recovered.

We are proud that through the vigilant efforts of our frontline heroes, and those working behind the scenes, we were able to deliver an uninterrupted supply of food and grocery products to all of our customers: store guests; independent retailers; national accounts; and military resale agencies.  

 

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SpartanNash Company Proxy Statement

 


 

EXECUTIVE COMPENSATION (cont’d)

 

 

Interim Chief Executive Officer Compensation

Following the Board’s decisive action in August 2019 exiting the former President and Chief Executive Officer, the Board replaced him on an interim basis with the Company’s Chairman of the Board, and previous Chief Executive Officer, Mr. Dennis Eidson, while the Board searched for the future Chief Executive Officer. Prior to serving as Interim Chief Executive Officer, Mr. Eidson successfully led the Company as Chief Executive Officer for over eight years and has served continuously as Chairman of the Board of Directors since 2016. He has extensive knowledge of the Company’s operations, industry, customers, and the competitive context.

In 2019, the Compensation Committee received analysis from its compensation consultant regarding an appropriate compensation opportunity for Mr. Eidson as Interim Chief Executive Officer. The Committee considered Mr. Eidson’s experience and qualifications, the market analysis performed by the compensation consultant, and the Committee’s goal to deliver compensation at the median of our peer group. The Committee recommended and the Board approved an overall compensation opportunity for Mr. Eidson consisting of:

 

A signing bonus of $600,000;

 

Annual base salary of $1,400,000;

 

Quarterly cash incentive program pursuant to which Mr. Eidson was eligible to earn up to $200,000 per three-month period (no more than $800,000 in the aggregate) based on the achievement of objectives determined by the Board of Directors;

 

An initial grant of “phantom units” having a value of $1,000,000 and quarterly grants having a value of $430,000 per three-month period (subject to service requirements). Rather than issue equity under the Company’s 2015 Stock Incentive Plan, the Board of Directors issued Mr. Eidson an instrument designed to deliver the shareholder alignment of equity without the dilutive impact.

Mr. Eidson’s term as Interim President and Chief Executive Officer was set to last no longer than through August 2020. The pandemic, however, extended the timeline for the Company’s search for a future Chief Executive Officer. Mr. Eidson graciously agreed to continue to serve for an additional 90 days to allow the search process to successfully conclude. Mr. Eidson’s service as Interim President and Chief Executive Officer ended September 20, 2020; the role of President and Chief Executive Officer was assumed by Mr. Tony Sarsam on September 21, 2020.

The Board met, without Mr. Eidson in attendance, when determining whether to extend Mr. Eidson’s tenure as Interim President and Chief Executive Officer and when voting on the compensation to be paid to Mr. Eidson in that role. In August 2020 the Board approved an overall compensation opportunity for Mr. Eidson for the extension of his service as Interim President and Chief Executive Officer that is appropriate for a Chief Executive Officer with his experience and qualifications, designed to continue the same level of compensation as offered during the initial term of his service other than sign on bonuses. The compensation opportunity consisted of:

 

Annual base salary of $1,400,000;

 

Monthly cash incentives of $116,667;

 

Monthly restricted stock grants with a value of $226,667, prorated based on actual time served.  

Because Mr. Eidson agreed to serve on an interim basis only, the Board of Directors previously did not authorize relocation assistance for Mr. Eidson and instead agreed to provide or reimburse necessary travel from his residence in Florida to Company locations as needed, and to provide him with temporary housing near the Company’s Grand Rapids Service Center. Those arrangements were continued during the extension period. Mr. Eidson was not provided with any arrangements for severance or change-in-control payments.  

 

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SpartanNash Company Proxy Statement

 


 

EXECUTIVE COMPENSATION (cont’d)

 

 

Chief Executive Officer Search and Compensation

The Board formed a Transition Committee to lead the search for the new Chief Executive Officer in August 2019. The Transition Committee was comprised of Mr. Douglas A. Hacker, Lead Independent Director (Chair); Mr. Eidson; Ms. Yvonne R. Jackson, Chair of the Compensation Committee; and Mr. Matthew M. Mannelly. Mr. Eidson, Mr. Hacker and Ms. Jackson led the Board’s earlier processes which resulted in the exit of the former Chief Executive Officer.

In connection with his appointment as President and Chief Executive Officer, effective on September 21, 2020, Mr. Sarsam will receive the following:

 

Annual base salary of $850,000;

 

Eligibility to receive a cash bonus for 2020 targeted at 125% of his base salary under the SpartanNash Annual Incentive Plan, based upon his eligible earnings during fiscal year 2020;

 

Eligibility to participate in the SpartanNash Long Term Incentive Plan at a target level equal to $3,200,000, pro-rated for the period from September 21, 2020 through the end of fiscal year 2020;

 

Relocation assistance and reimbursement of legal fees related to the preparation and negotiation of his employment agreement; and

 

In accordance with the terms of an employment agreement between Mr. Sarsam and the Company, severance upon termination of employment by the Company without “Cause” or by Mr. Sarsam for “Good Reason” (in each case, as defined in the employment agreement) comprised of:

 

o

52 weeks of his base salary in a lump sum payment;

 

o

a lump sum payment of his pro-rated annual bonus under the Annual Incentive Plan or successor plan based upon the number of days employed during the applicable plan year and the performance achievement of the applicable bonus targets;

 

o

reimbursement of COBRA premiums for up to 52 weeks; and

 

o

outplacement assistance.

The Company and Mr. Sarsam also entered into the Company’s standard form of Executive Severance Agreement, providing for the payment of severance in connection with a change in control and more fully described below under “Potential Payments Upon Termination or Change in Control—Executive Severance Agreements.”

Separation of Mr. Lentz

Mr. Lentz served as our Executive Vice President, President Food Distribution until December 2020, when he was terminated by the Company following elimination of his position. His employment was treated as a termination without cause under his employment agreement. Pursuant to his employment agreement, the Company paid him a severance payment of $620,000, which was equal to his annual base salary, will reimburse certain COBRA expenses for up to 52 weeks, and will provide up to six months of outplacement assistance.  

Incentive Compensation Results

The Compensation Committee is keenly focused on approving compensation plans that reward performance. The extraordinary results achieved in 2020 generated bonus payouts earned in 2020 under both the 2018 Long Term Incentive Plan (“LTIP”) and the 2020 Annual Incentive Plan (“AIP”).

 

33

SpartanNash Company Proxy Statement

 


 

EXECUTIVE COMPENSATION (cont’d)

 

2018 LTIP Performance Cash – 16% Payout

The 2018 LTIP included a three-year measurement period for the payout of performance cash. The plan included three metrics: Adjusted EPS; Return on Invested Capital; and Adjusted EBITDA. The measurement period ended in 2020, and performance was measured based on the fiscal year end 2020 results. Management achieved a payout of 16% on the Adjusted EPA metric.  

2020 AIP Payout – 146 - 200% Payout

The 2020 AIP components were principally based on financial performance; for the NEOs, 75% - 80% of the bonus opportunity was tied directly to financial goals. As a result of the Company’s performance during 2020, the bonus payout earned by the NEOs on the financial goals portion of the 2020 AIP opportunity ranged from 146 – 200%.  

The remainder of the AIP opportunity for the NEOs was based on performance against a strategic goal. The Company has publicly disclosed its focus on the Project One team initiative, which is the Company-wide program to drive growth, while increasing efficiency and reducing costs. The strategic goal for each NEO, other than Mr. Eidson (who was not an AIP plan participant), was to drive that initiative. The performance of the strategic component generated a 200% payout.

Analysis of Compensation Elements for 2020

Overview

The following is a discussion of key compensation programs and decisions for 2020.

1. Annual Base Salary

Base salary provides our executives with a fixed base annual income and helps us attract and retain high-performing executives. The Compensation Committee sets executive salaries each year in light of individual performance reviews, internal pay equity considerations, the scope and complexity of the executive’s role and an assessment of peer group and market survey data provided by our independent compensation consultant. The table below summarizes base salary decisions for our NEOs in 2020, except for Mr. Eidson, whose compensation was fixed under his employment agreement.

 

 

 

2020 Base Salary

 

 

 

2019 Base Salary

(at end of year)

 

 

Percentage Increase

 

Mr. Sarsam

 

$

 

850,000

 

 

 

N/A

 

 

N/A

 

Mr. Shamber

 

 

 

475,000

 

 

$

 

460,000

 

 

3%

 

Ms. Mahoney

 

 

 

475,000

 

 

 

 

460,000

 

 

3%

 

Ms. Trupiano

 

 

 

440,000

 

 

 

 

400,000

 

 

10%

 

Ms. Raya

 

 

 

420,000

 

 

 

 

400,000

 

 

5%

 

Mr. Lentz

 

 

 

620,000

 

 

 

 

600,000

 

 

3%

 

2. Annual Cash Incentive Awards.

Each named executive officer other than Mr. Eidson was granted an opportunity to earn an annual incentive award under the Company’s 2020 AIP. Mr. Sarsam’s annual incentive award was prorated based on time worked during the 2020 fiscal year.  

The value of the annual incentive award is dependent on the Company’s achievement of specified levels of adjusted consolidated net earnings and net sales, business unit operating results (for certain executives) and performance against strategic objectives.

 

34

SpartanNash Company Proxy Statement

 


 

EXECUTIVE COMPENSATION (cont’d)

 

The annual incentive plan includes three “gating” requirements that are intended to maintain a close link between pay and performance:  

 

No payout will be made for earnings or sales metrics unless the Company achieves the 80% threshold level of performance of Adjusted Consolidated Net Earnings; and

 

No payout will be made for strategic goals unless the Company achieves 70% of the Adjusted Consolidated Net Earnings target; and

 

Payouts (if any) on non-financial strategic goals limited to 100 percentage points above the payout for the corporate financial goals (e.g., if the plan pays 60% of target for the corporate financial goals, then any strategic goal payout is limited to 160%).

The formula for determining payouts under the 2020 AIP is a simple one:  

 

Each participating NEO has a target opportunity, which equals a set percentage of his or her base pay earned within the fiscal year,  

 

Each participating NEO has set percentages of his/her target opportunity that are tied to financial and strategic metrics

 

Performance against the metrics is calculated to determine what percentage of the opportunity is earned.  

The chart below lists the AIP annual base pay percentage opportunity, metric weightings and payout earned under the 2020 AIP:

 

 

Target AIP Payout (% of Base Salary)

 

 

Financial Goal Opportunity

 

Strategic Goal Opportunity

 

 

2020 Payout Percentage Earned

 

 

 

2020 Payout

 

Mr. Sarsam

 

125%

 

 

80% Corporate Financial

 

20%

 

 

200%

 

 

$

 

612,981

 

Mr. Shamber

 

70%

 

 

75% Corporate Financial

 

25%

 

 

200%

 

 

 

 

673,750

 

Ms. Mahoney

 

60%

 

 

75% Corporate Financial

 

25%

 

 

200%

 

 

 

 

577,500

 

Ms. Trupiano

 

60%

 

 

75% Corporate Financial

 

25%

 

 

200%

 

 

 

 

528,923

 

Ms. Raya

 

60%

 

 

75% Corporate Financial

 

25%

 

 

200%

 

 

 

 

509,077

 

Mr. Lentz

 

80%

 

 

20% Corporate Financial

60% Distribution Business Unit Financial

 

20%

 

 

146%

 

 

 

 

720,720

 

ANNUAL CASH INCENTIVE AWARD PAYOUT DESIGN

 

 

 

Adjusted

Net Sales

(in thousands)

 

 

Percentage of

Targeted

Adjusted Net Sales

Achieved for 2020

 

 

Percent of Target

Annual Incentive

Award Paid*

 

 

 

Adjusted

Consolidated

Net Earnings

(in thousands)

 

 

Percentage of

Targeted

Consolidated

Net Earnings

Achieved for 2020

 

 

Percent of Target

Annual Incentive

Award Paid*

 

Threshold

$

 

8,282,358

 

 

 

95.0

%

 

 

20.0

%

 

$

 

38,134

 

 

 

80.0

%

 

 

10.0

%

Target

 

 

8,718,272

 

 

 

100.0

%

 

 

100.0

%

 

 

 

47,667

 

 

 

100.0

%

 

 

100.0

%

Maximum

 

 

9,154,185

 

 

 

105.0

%

 

 

200.0

%

 

 

 

55,437

 

 

 

116.3

%

 

 

200.0

%

Actual**

 

 

9,383,664

 

 

 

107.6

%

 

 

200.0

%

 

 

 

93,726

 

 

 

196.6

%

 

 

200.0

%

 

*

The threshold, target, and maximum annual incentive award for each named executive officer is reported in the Grants of Plan-Based Awards Table in this proxy statement. The percentage of Target annual incentive award paid is interpolated for actual achievement between the threshold and maximum performance levels identified above.

**

Company’s actual performance is presented after adjustments as approved by the Board of Directors under the terms of the Executive Cash Incentive Plan of 2015.

3. Long-Term Incentive Awards

Each executive officer is provided a long-term incentive award opportunity that consists of a mix of 50% performance cash and 50% restricted stock.

 

35

SpartanNash Company Proxy Statement

 


 

EXECUTIVE COMPENSATION (cont’d)

 

Long-Term Performance Cash Incentive Awards. When designing the 2020 LTIP plan, the Committee first evaluated whether to continue the existing LTIP design in light of current business conditions. The Committee considered whether the metrics were appropriate to the current state of the business, especially considering that the food distribution and retail sectors have experienced significant disruption over the past few years. The Committee determined the metrics were appropriate, and next focused on the manner in which performance under the LTIP was measured.  

Prior LTIP plans utilized a three-year performance period, and performance was measured against the performance results on the last day of the three-year performance period, without regard to performance at intervals during the three-year performance period. Mindful that business responses to disruption often require unforeseen investment and realignment of priorities, and considering the impact disruptions have had on achievement of the LTIP cash incentive opportunities for prior periods, the Committee decided to include annual growth targets, in addition to measuring performance against the metrics on the last day of the three-year performance period. To avoid increasing the total compensation opportunity by adding the annual measurement points, the Committee capped the total LTIP opportunity at the payout available on achievement of the three-year metrics.  

In May 2020, each named executive officer other than Mr. Eidson and Mr. Sarsam was granted an opportunity to earn a long-term performance cash incentive award under the 2020 LTIP. Mr. Sarsam was granted a pro-rated 2020 LTIP award when he joined the Company in September 2020. Under the 2020 LTIP, each award is based on three metrics:

 

1.

Adjusted Earnings Per Share (“Adjusted EPS”) — a basis for the valuation of our stock and an effective measure of our financial performance and the growth of shareholder wealth.

 

2.

Plan-Based Return on Invested Capital (“ROIC”) — a measure of the profitability and value-creating potential after taking into account the amount of initial capital invested.

 

3.

Adjusted Earnings Before Interest, Taxes, Depreciation, and Amortization (“Adjusted EBITDA”) — which we define as net earnings from continuing operations plus depreciation and amortization, and other non-cash items including share-based payments and the LIFO provision, as well as adjustments for unusual items that do not reflect the ongoing operating activities of the Company, costs associated with the closing of operational locations, interest expense and the provision for income taxes to the extent deducted in the computation of net earnings.

The cash portion of the May 2020 award opportunity is based on the following:

Performance Measurement

(For 2020 through Fiscal 2022)

 

Percentage of Long-

Term Cash Incentive Award

 

Adjusted EPS

 

 

40

%

ROIC

 

 

20

%

Adjusted EBITDA

 

 

40

%

The maximum amount a participant can earn on the performance cash portion of the 2020 LTIP is determined by reference to the final-year performance target; there is the potential for an upside opportunity if the final year target performance is exceeded, with a maximum payout equal to 200% of the total target cash opportunity. The amount that can be earned for achieving an annual growth target is 25% of the target level for each year of the three-year performance periods, with no upside opportunity. The Committee capped the total 2020 LTIP opportunity at the payout available on achievement of the three-year metrics.

 

36

SpartanNash Company Proxy Statement

 


 

EXECUTIVE COMPENSATION (cont’d)

 

The amount of each component of the long-term cash incentive award earned for the three-year performance period will be determined according to the following matrices (the percentage of Target long-term cash incentive award paid is interpolated for actual achievement between the threshold and maximum performance levels identified in each table):

MAY 2020 LONG-TERM CASH AWARD

ADJUSTED EPS COMPONENT

 

 

 

Annual Measurement

 

 

Final-year Measurement

 

 

 

Percentage of

Earnings Per Share

Achieved

 

 

Percent of Target

Long- Term Cash

Incentive Award

Paid

 

 

Percentage of

Earnings Per Share

Achieved

 

 

Percent of Target

Long- Term Cash

Incentive Award

Paid

 

 

 

<90.0

%

 

 

0

%

 

<80

%

 

 

0

%

Threshold

 

90.0

%

 

 

10.0

%

 

80.0

%

 

 

10.0

%

Target

 

100.0

%

 

 

100.0

%

 

100.0

%

 

 

100.0

%

Maximum

 

100.0

%

 

 

100.0

%

 

≥116.3

%

 

 

200.0

%

MAY 2020 LONG-TERM CASH AWARD

ROIC COMPONENT

 

 

 

Annual Measurement

 

 

Final-year Measurement

 

 

 

Percentage of

Plan ROIC

Achieved

 

 

Percent of Target

Long- Term Cash

Incentive Award

Paid

 

 

Percentage of

Plan ROIC

Achieved

 

 

Percent of Target

Long- Term Cash

Incentive Award

Paid

 

 

 

<92

%

 

 

0

%

 

<80

%

 

 

0

%

Threshold

 

92.0

%

 

 

10.0

%

 

80.0

%

 

 

10.0

%

Target

 

100.0

%

 

 

100.0

%

 

100.0

%

 

 

100.0

%

Maximum

 

100.0

%

 

 

100.0

%

 

≥116.3

%

 

 

200.0

%

 MAY 2020 LONG-TERM CASH AWARD

ADJUSTED EBITDA COMPONENT

 

 

 

Annual Measurement

 

 

Final-year Measurement

 

 

 

Percentage of

Adjusted EBITDA

Achieved

 

 

Percent of Target

Long- Term Cash

Incentive Award

Paid

 

 

Percentage of

Adjusted EBITDA

Achieved

 

 

Percent of Target

Long- Term Cash

Incentive Award

Paid

 

 

 

<95

%

 

 

0

%

 

<80

%

 

 

0

%

Threshold

 

95.0

%

 

 

50.0

%

 

80.0

%

 

 

10.0

%

Target

 

100.0

%

 

 

100.0

%

 

100.0

%

 

 

100.0

%

Maximum

 

100.0

%

 

 

100.0

%

 

≥116.3

%

 

 

200.0

%

The potential values of the long-term cash incentive award are set forth below.

 

 

 

Adjusted EPS (40%)

 

 

Adjusted EBITDA 40%)

 

 

ROIC (20%)

 

 

Target

Long-Term

Cash

Incentive

 

Name

 

Threshold

 

 

Target

 

 

Max.

 

 

Threshold

 

 

Target

 

 

Max.

 

 

Threshold